WEBVTT NOTE Ownership 1 00:00:00.000 --> 00:00:05.000 Ownership of Property 2 00:00:05.000 --> 00:00:12.000 All property that is property is subject to ownership. 3 00:00:12.000 --> 00:00:16.000 And property can be owned in several ways. 4 00:00:16.000 --> 00:00:26.000 It can be owned individually, it can be owned jointly, it can be owned corporately, or it can be owned collectively. 5 00:00:26.000 --> 00:00:32.020 Now, those are four different ways of owning it, and I am going to talk about it in detail 6 00:00:32.020 --> 00:00:37.240 in a minute, but first let me point out that property doesn't have to be owned to be 7 00:00:37.240 --> 00:00:44.180 property. Property can exist in an unowned condition, it can exist in an owned condition, 8 00:00:44.180 --> 00:00:48.380 and it can also be in a state of conflict where we aren't sure either what the property 9 00:00:48.380 --> 00:00:55.640 is or who owns it. Let me take unowned property first and show you what we have here. 10 00:00:55.640 --> 00:01:00.840 When we are talking about unowned property, we are talking about a piece of property that 11 00:01:00.840 --> 00:01:05.760 is subject to ownership, that is, it has all of the characteristics that would make ownership 12 00:01:05.760 --> 00:01:12.320 possible but for some reason at that particular time it isn't owned. 13 00:01:12.320 --> 00:01:17.160 Now, unowned property falls into two general classifications. 14 00:01:17.160 --> 00:01:20.860 There is what we usually think of as virgin property. 15 00:01:20.860 --> 00:01:25.460 That is to say, property, it would always be of the natural order, that is, it would 16 00:01:25.460 --> 00:01:42.460 and Relate to Natural Resources, the Land, Water, Air, Minerals, Metals and so on, that exists, it would be subject to ownership, but there just isn't an owner, and one hasn't appeared and therefore it is what we call virgin property or virgin territory. 17 00:01:42.460 --> 00:01:49.460 Today there isn't very much of that type of land property left in this world, if any. 18 00:01:49.460 --> 00:01:56.540 Of course, we do have land under the oceans that we have never become the owners of. 19 00:01:56.540 --> 00:01:58.640 It's there, and it is land. 20 00:01:58.640 --> 00:02:01.700 But there's so much water on it, we don't find it useful. 21 00:02:01.700 --> 00:02:04.140 And then, of course, we could own the water. 22 00:02:04.140 --> 00:02:10.020 But it's so hard to make a permanent boundary of different sections of water that we haven't 23 00:02:10.020 --> 00:02:12.420 done very much of that either. 24 00:02:12.420 --> 00:02:19.860 So in the main the oceans are unowned, large bodies of water in a sense are unowned, at 25 00:02:19.860 --> 00:02:26.580 least they are not owned privately, and the land under them is in a sense unowned. 26 00:02:26.580 --> 00:02:31.460 And there may be in remote areas of the world certain islands that have escaped notice and 27 00:02:31.460 --> 00:02:33.780 remain outside of ownership. 28 00:02:33.780 --> 00:02:35.220 That is entirely possible. 29 00:02:35.220 --> 00:02:38.140 My point would be that they are property. 30 00:02:38.140 --> 00:02:43.220 They are subject to ownership, but for one reason or another they are not owned. Perhaps 31 00:02:43.220 --> 00:02:49.540 more germane to this particular point of virgin property would be the moon at the present 32 00:02:49.540 --> 00:02:55.340 time. Now, that's just a great big piece of real estate, flying around in the sky. 33 00:02:55.340 --> 00:03:00.260 But it's unowned. And the reason, of course, is that there aren't any owners there, so 34 00:03:00.260 --> 00:03:05.500 there is no way that we can practically make use of it at the present time. The time may 35 00:03:05.500 --> 00:03:13.860 Come, in which case it perhaps will become real estate and it will be owned. It is property. 36 00:03:13.860 --> 00:03:19.900 All you have to do is to supply the missing ingredient of an owner and all the other factors 37 00:03:19.900 --> 00:03:26.860 are there. So that's property. The whole moon is property, but it's unowned property. 38 00:03:26.860 --> 00:03:32.980 So that would be one type of unowned property. Now another type of unowned property, the 39 00:03:32.980 --> 00:03:38.220 The only other type would be property that has been owned but now for some reason is 40 00:03:38.220 --> 00:03:46.940 disowned by the owner. This usually occurs on a daily basis with all of us. We obtain 41 00:03:46.940 --> 00:03:53.700 property and then we use it up. That is, we use up that part of it that we got it for. 42 00:03:53.700 --> 00:03:59.320 We absorb its utility, whatever it was, and that part of it that is left, we discard. 43 00:03:59.320 --> 00:04:03.960 That's why we have wastebaskets and garbage disposal units and so on. 44 00:04:03.960 --> 00:04:07.800 A woman goes to the store and buys a can of beans. 45 00:04:07.800 --> 00:04:13.680 She comes home and she attacks the can with a sharp instrument, destroys its symmetry 46 00:04:13.680 --> 00:04:16.640 and then empties the contents into another container. 47 00:04:16.640 --> 00:04:18.840 Now what does she do with the can? 48 00:04:18.840 --> 00:04:20.760 Well she probably throws it away. 49 00:04:20.760 --> 00:04:22.320 She doesn't want it. 50 00:04:22.320 --> 00:04:23.320 Why? 51 00:04:23.320 --> 00:04:27.720 Doesn't she realize that she probably paid more for the can than she did for the beans 52 00:04:27.720 --> 00:04:29.260 that were in the can? 53 00:04:29.260 --> 00:04:35.300 So she may realize it, but she didn't want the can, she just wanted the beans. 54 00:04:35.300 --> 00:04:37.400 Well why did she buy the can then? 55 00:04:37.400 --> 00:04:39.420 Was somebody taking advantage of her? 56 00:04:39.420 --> 00:04:40.420 No. 57 00:04:40.420 --> 00:04:44.540 No, she bought the can because it's so inconvenient to bring the cooked beans in their 58 00:04:44.540 --> 00:04:46.640 sauces home in her hand. 59 00:04:46.640 --> 00:04:52.260 So she got it in a can, and she brought it home, and then the can had fulfilled its utility, 60 00:04:52.260 --> 00:04:56.920 so she took it out of that can and put it in another container, at which point she has 61 00:04:56.920 --> 00:04:58.540 no further use of the can. 62 00:04:58.540 --> 00:05:04.100 Now the can is a property, but at this point she disowns it. It is of no further interest 63 00:05:04.100 --> 00:05:09.640 to her. She has utilized it, and it's gone as far as she is concerned. She wants to get 64 00:05:09.640 --> 00:05:16.460 rid of it. And so we do this type of thing all the time. We buy various things. We utilize 65 00:05:16.460 --> 00:05:22.620 them. There's often a residue left, or some part of it is left, and we throw that out, 66 00:05:22.620 --> 00:05:26.860 because it's no longer valuable to us. In other words, the reason we acquired the property 67 00:05:26.860 --> 00:05:32.780 in the first place is because we thought we saw a value in it and then when the value 68 00:05:32.780 --> 00:05:38.620 is gone we want to get rid of it. So one of the things about all ownership would be the 69 00:05:38.620 --> 00:05:43.420 element of value. If we didn't value it at all we would never even try to become the 70 00:05:43.420 --> 00:05:48.540 owner. And the next thing that you can see here readily would be the concept of boundary 71 00:05:48.540 --> 00:05:53.500 because when you buy a can of beans what you're buying is the beans with a boundary around 72 00:05:53.500 --> 00:05:57.700 and it has to be the kind of boundary that will protect those beans retain 73 00:05:57.700 --> 00:06:01.900 their freshness and their succulents or whatever it is you get from beans and 74 00:06:01.900 --> 00:06:06.740 and then once you once you don't need that boundary anymore because you're 75 00:06:06.740 --> 00:06:11.460 going to consume them well you throw the little package away much of our food 76 00:06:11.460 --> 00:06:16.540 comes today this way it comes all prepackaged it's a very intelligent way 77 00:06:16.540 --> 00:06:20.960 of handling properties that we want to handle this way and usually when we're 78 00:06:20.960 --> 00:06:25.460 through, we throw away the packaging. That may be one of our problems. We have so much 79 00:06:25.460 --> 00:06:30.180 good packaging around that we can't even find enough wastebasket for it and so we litter 80 00:06:30.180 --> 00:06:35.580 the landscape and we've got other problems as a result. But that is just another opportunity 81 00:06:35.580 --> 00:06:40.800 for another free enterprise to come along and solve that problem as a matter of fact. 82 00:06:40.800 --> 00:06:48.500 But we'll talk about that some other time perhaps. Anyway, we have the unowned property 83 00:06:48.500 --> 00:06:54.860 that results from the owner disowning something that at one time he valued. 84 00:06:54.860 --> 00:07:00.260 Many times I suppose we usually think of unowned property in this connection as being either 85 00:07:00.260 --> 00:07:09.980 broken or partly used up and of no particular substance insofar as size and magnitude is 86 00:07:09.980 --> 00:07:10.980 concerned. 87 00:07:10.980 --> 00:07:17.180 Actually, according to the figures I have seen, the American buying public abandons 88 00:07:17.180 --> 00:07:23.540 is about two million automobiles every year. Most of them, fortunately, are driven to 89 00:07:23.540 --> 00:07:28.160 a junkyard and the owner just gets out and says, it isn't worth anything, but this 90 00:07:28.160 --> 00:07:34.260 is a junkyard, why don't you take it? And he disowns it. Now it's quite possible that 91 00:07:34.260 --> 00:07:38.500 you could say, and I think it's probably true, that most junkyard dealers would say, 92 00:07:38.500 --> 00:07:44.580 fine, and they then accept the ownership of the car and therefore it isn't really out 93 00:07:44.580 --> 00:07:51.380 of Ownership. It is simply converted into what we call junk. But usually title doesn't 94 00:07:51.380 --> 00:07:57.220 pass at this time. That is the legal title. The owner just forgets it, and the junkyard 95 00:07:57.220 --> 00:08:03.540 dealer doesn't bother to have it transferred to him. The car goes out of service. In effect, 96 00:08:03.540 --> 00:08:08.500 legally speaking, it is no longer a piece of property. It is a piece of junk. It has 97 00:08:08.500 --> 00:08:13.780 been disowned. And, of course, in point of fact, there are quite a few thousand people 98 00:08:13.780 --> 00:08:18.060 every year who don't even bother to drive their cars to the junkyard. They just abandon 99 00:08:18.060 --> 00:08:23.020 them on the highway, which is too bad. And that does create some littering and it's 100 00:08:23.020 --> 00:08:30.940 unfortunate. But that's what I mean by abandoning or disowning a property. Yet that car at the 101 00:08:30.940 --> 00:08:37.020 time it was first made and first sold was worth quite a bit of money, I would presume. 102 00:08:37.020 --> 00:08:42.420 We have even gone through the processes of abandoning real estate and improved real estate 103 00:08:42.420 --> 00:08:48.160 at that. In fact, we have whole communities that at one time were built up, a lot of money 104 00:08:48.160 --> 00:08:53.620 invested in them, many people living in this area wherever it was, and then the whole community 105 00:08:53.620 --> 00:09:02.120 has been abandoned and simply given up. Here's a case of disowning whole areas, and we call 106 00:09:02.120 --> 00:09:06.980 these communities, of course, ghost towns. The only people that own them now are the 107 00:09:36.980 --> 00:09:41.300 in the Old West, possibly back east. I'm not too familiar with that. There are certainly 108 00:09:41.300 --> 00:09:47.900 places in the country where perhaps they ought to become ghost towns, but as I say, that's 109 00:09:47.900 --> 00:09:54.780 no longer being done. In any case, the point is that we can do this. We can acquire property 110 00:09:54.780 --> 00:10:01.280 and we can get rid of it. Normally we would try to sell it, and hopefully at a profit, 111 00:10:01.280 --> 00:10:06.620 but if we can't sell it, well maybe we can give it away. But if we can't give it away 112 00:10:06.620 --> 00:10:12.220 and we can't sell it and we still don't want it, we may end up disowning it. 113 00:10:12.220 --> 00:10:18.420 So property comes into our hands and we become owners and then it also goes out of our hands 114 00:10:18.420 --> 00:10:20.700 and we become ex-owners. 115 00:10:20.700 --> 00:10:23.380 We just don't want it anymore. 116 00:10:23.380 --> 00:10:29.220 So property flows in and out of human ownership. 117 00:10:29.220 --> 00:10:31.500 Now that's unowned property. 118 00:10:31.500 --> 00:10:33.780 Now let's go to owned property. 119 00:10:33.780 --> 00:10:42.780 Boundary can be owned, as I have already mentioned, individually, jointly, corporately, or collectively. 120 00:10:42.780 --> 00:10:49.980 The characteristics of all ownership, whether it relates to the individual, or joint ownership, 121 00:10:49.980 --> 00:10:55.260 to corporate ownership, or to collective ownership, there are certain characteristics that have 122 00:10:55.260 --> 00:11:00.940 to apply. First, the concept of value, which I have already given you. Then the concept 123 00:11:00.940 --> 00:11:06.700 First of Boundary, we have to know what it is we own and where it is. And then the third 124 00:11:06.700 --> 00:11:15.340 element of ownership is the element of control. Whoever is the owner has to treat that property 125 00:11:15.340 --> 00:11:22.220 as though it is an extension of himself. That is to say, he becomes the decision-maker over 126 00:11:22.220 --> 00:11:29.500 the property just as he would if it were his arm, his leg, or some other part of him. That's 127 00:11:29.500 --> 00:11:35.780 is, in fact, what ownership means. Now when we have individual ownership, we simply have 128 00:11:35.780 --> 00:11:43.460 all of the attributes of ownership converging on the single person. The person owns a property. 129 00:11:43.460 --> 00:11:49.740 He values it. He knows how big it is and where it is. And he exerts the decision-making function 130 00:11:49.740 --> 00:11:57.140 over it. He exercises sovereign control. And when we use the term sovereign control, we 131 00:11:57.140 --> 00:12:04.920 We mean he is the ultimate authority over that property. Keep this in mind. All property 132 00:12:04.920 --> 00:12:14.100 is subject to human control. Somewhere, somebody can and will make an ultimate decision over 133 00:12:14.100 --> 00:12:22.300 that property. Whoever is in a position to make that decision is the owner. That's how 134 00:12:22.300 --> 00:12:32.020 how it works. So if you have real ownership, the party in a position to value, to bound, 135 00:12:32.020 --> 00:12:38.500 and to control in the sense that his decisions will be acted upon in respect of the property, 136 00:12:38.500 --> 00:12:42.380 that's the owner. That's the real owner of the property. 137 00:12:42.380 --> 00:12:47.460 Now let me mention this matter of value. In the early days when we were first studying 138 00:12:47.460 --> 00:12:52.780 in this area, we used to think that for a property to really be a property, it would 139 00:12:52.780 --> 00:12:58.420 have to be valued by at least two persons, because the idea was that it would have to 140 00:12:58.420 --> 00:13:03.220 be a property that was marketable. And, of course, nothing is marketable if you don't 141 00:13:03.220 --> 00:13:07.900 have competing bids. You have to have somebody willing to buy and somebody willing to sell, 142 00:13:07.900 --> 00:13:13.420 or you can't market anything. And so the idea was that at least two people would have 143 00:13:13.420 --> 00:13:25.860 We now recognize the element of what is called sentimental value. It would be possible for 144 00:13:25.860 --> 00:13:31.540 a person to value an item that nobody else in the world would value and it would still 145 00:13:31.540 --> 00:13:36.300 be a property, even though you couldn't get a competing bid. An example of what I mean 146 00:13:36.300 --> 00:13:42.240 could well be this. We have a young lady, for instance, going on her first formal dance 147 00:13:42.240 --> 00:13:47.960 It's a very big affair in her life, and her young man calls on her and presents her with 148 00:13:47.960 --> 00:13:52.320 a corsage for the evening. By the time the evening is over, the corsage, of course, has 149 00:13:52.320 --> 00:13:57.600 been through the wars, but she extracts a blossom from it, she takes it home, and she 150 00:13:57.600 --> 00:14:04.840 presses it in a book as a never-to-be-forgotten memento of a never-to-be-forgotten evening. 151 00:14:04.840 --> 00:14:11.840 Now, it is unlikely that we could find a competing bidder for that crushed blossom in the book. 152 00:14:11.840 --> 00:14:19.280 I understand from my economist friends that the bids on dried pressed flowers are today very low. 153 00:14:19.280 --> 00:14:24.240 Nonetheless, as far as the girl is concerned, it could be the most valuable property she has, 154 00:14:24.240 --> 00:14:28.880 depending on her sentimental attachment to the memory and to the man. 155 00:14:28.880 --> 00:14:30.720 So that's property. 156 00:14:30.720 --> 00:14:40.080 It doesn't have to be valued by more than one person to fulfill that part of the ownership triumvirate. 157 00:14:40.080 --> 00:14:48.960 Now, let me take joint property and show you how joint ownership occurs. When we have joint ownership, 158 00:14:48.960 --> 00:14:56.640 we have two or more persons who own a given property. Now, the characteristic here is 159 00:14:57.520 --> 00:15:06.160 that the amount of the property owned must be clearly indicated, or you don't have joint 160 00:15:06.160 --> 00:15:14.000 Joint ownership, you have ownership in conflict. In other words, if my wife and I own a house 161 00:15:14.000 --> 00:15:21.760 together, we would be called joint owners, but it would be specified that each of us 162 00:15:21.760 --> 00:15:32.340 owns 50% of the house or that I own 51% and she 49% or it can be 40, 60% or any other 163 00:15:32.340 --> 00:15:44.340 The idea that she owns 100% of the house and I own 100% of the same house is not possible. 164 00:15:44.340 --> 00:15:49.100 That would create a condition of conflict automatically. 165 00:15:49.100 --> 00:15:56.000 What we try to show wherever joint ownership occurs is the percentage of ownership that 166 00:15:56.000 --> 00:15:59.060 resides in each one of the joint owners. 167 00:15:59.060 --> 00:16:04.220 There could be two, or there could be any number. We could call it, and sometimes we 168 00:16:04.220 --> 00:16:10.340 do call it a partnership, where two or possibly many more, several hundred, or you could have 169 00:16:10.340 --> 00:16:17.720 several thousand. There is no known limit to this, where these persons jointly own a 170 00:16:17.720 --> 00:16:25.060 given property. For instance, I know of a newspaper where there are 200 partners. They 171 00:16:25.060 --> 00:16:31.220 They own it jointly. It's not a corporation. It's joint ownership. Each one of the owners 172 00:16:31.220 --> 00:16:38.340 owns a small percentage of the total property. What is important here, however, not only 173 00:16:38.340 --> 00:16:44.980 is that the line of demarcation show us the boundaries of the total property, it must 174 00:16:44.980 --> 00:16:51.740 also show us the line of demarcation over which each person has sovereignty. So that 175 00:16:51.740 --> 00:17:00.420 But if I own 10% or 1% or 50% or whatever it is, there's got to be at least a line 176 00:17:00.420 --> 00:17:05.960 that can be drawn to specify how much of the property is really mine. 177 00:17:05.960 --> 00:17:10.380 And of course here's where you get into difficulty sometimes because along with that 178 00:17:10.380 --> 00:17:14.140 boundary there should be the element of control. 179 00:17:14.140 --> 00:17:20.020 I should be able to control my portion of the total property. 180 00:17:20.020 --> 00:17:25.480 Now when it's one big property, it would be hard to draw such a line. 181 00:17:25.480 --> 00:17:31.300 An example of the kind of dilemma you could get into could be provided with this illustration. 182 00:17:31.300 --> 00:17:36.300 Let's suppose that I'm a father having two sons, and I love both the boys and I love 183 00:17:36.300 --> 00:17:37.820 them equally. 184 00:17:37.820 --> 00:17:42.660 So I go out and buy one pony, because that's all I can afford, and I bring home one pony 185 00:17:42.660 --> 00:17:47.540 and I say to each of my sons, son, this is your pony. 186 00:17:47.540 --> 00:17:55.220 Or, I say, son, you own this pony and you've got fifty percent of it, and your brother 187 00:17:55.220 --> 00:18:00.820 owns the other fifty percent. But I don't make any further delineation. Now, who's 188 00:18:00.820 --> 00:18:06.760 going to ride the pony? I have perhaps created a condition of civil war in my own household 189 00:18:06.760 --> 00:18:13.700 because I haven't specified the boundary of control. Control is one of the vital elements 190 00:18:13.700 --> 00:18:19.060 of Ownership. And so if I want to keep peace in the family, I better be a little more specific. 191 00:18:19.060 --> 00:18:24.140 Now I can divide the pony up any way. I can say, you know, let's divide it in half lengthwise 192 00:18:24.140 --> 00:18:31.320 or crosswise, but that's not too practical. I can introduce another boundary, the boundary 193 00:18:31.320 --> 00:18:39.540 of time. We live in a space-time continuum, and we can bound property in time as well 194 00:18:39.540 --> 00:18:47.380 So, I could say to my sons, son number one, this is your pony, just as much as it is your 195 00:18:47.380 --> 00:18:54.020 brother, son number two, but you get to ride on the pony and make all the decisions concerning 196 00:18:54.020 --> 00:19:00.140 it on Monday, Wednesday, Friday, with the understanding that at the end of those days 197 00:19:00.140 --> 00:19:03.240 the control passes to your brother and the pony's got to be in good shape. 198 00:19:03.240 --> 00:19:06.620 You can't have done something to harm your brother's interest in it. 199 00:19:06.620 --> 00:19:11.560 And son number two, it's yours on Tuesday, Thursday and Saturday with the understanding 200 00:19:11.560 --> 00:19:15.180 that you have to leave it in good control and in good condition for your brother and 201 00:19:15.180 --> 00:19:17.780 on Sunday it reverts back to me. 202 00:19:17.780 --> 00:19:22.060 This way I could work it out so that there wouldn't be a conflict. 203 00:19:22.060 --> 00:19:27.960 But if I don't make some such delineation, I can get into real difficulties. 204 00:19:27.960 --> 00:19:34.380 And I might point out that this can be a very real problem with the current practice in 205 00:19:34.380 --> 00:19:42.960 and so many places where we have encouraged joint ownership of all kinds of what is sometimes 206 00:19:42.960 --> 00:19:49.620 called community property. So you have a husband and wife who jointly own a house. Well, that's 207 00:19:49.620 --> 00:19:54.900 great. But you can't very well saw the house in half. And now we get to the place 208 00:19:54.900 --> 00:19:58.860 where the husband says, I think what we ought to do is sell the house and move to another 209 00:19:58.860 --> 00:20:03.940 the location, or perhaps the wife says it, and the other spouse, whoever it is, says, 210 00:20:03.940 --> 00:20:08.700 I don't want to sell it. All my interests are here, and I want to keep it. Now what 211 00:20:08.700 --> 00:20:14.080 is the house going to do? Houses don't make decisions. People make decisions, and property 212 00:20:14.080 --> 00:20:19.480 responds to human decision. Now you can't do both with that house at the same time. 213 00:20:19.480 --> 00:20:24.340 If you sell it, well then you hurt one party, and if you keep it you hurt the other. So 214 00:20:24.340 --> 00:20:30.700 So it's a very important thing to have along with the boundary that specifies the amount 215 00:20:30.700 --> 00:20:37.420 of interest you have in a property, you want to specify where the control resides as well. 216 00:20:37.420 --> 00:20:41.660 I'll tell you the kind of partnership, for instance, that is the most successful and 217 00:20:41.660 --> 00:20:47.140 that avoids conflict most. And that's the kind where you have a silent partner as well 218 00:20:47.140 --> 00:20:54.140 as an active partner. Let one man make ultimate decisions and let the other man be still. 219 00:20:54.340 --> 00:21:03.340 And I've seen such partnerships set up where the actual interest is mutual. That is, each one has a 50% interest. 220 00:21:03.340 --> 00:21:08.340 But one party says, well, this is going to be your baby at the outset. You make the decisions. 221 00:21:08.340 --> 00:21:14.340 I'm in it and I'm going to get half of any profit. But I'm not going to make the decisions. You make them. 222 00:21:14.340 --> 00:21:21.340 And that is usually a better one, a better, more lasting arrangement, more successful, usually, 223 00:21:21.340 --> 00:21:26.540 Then one where they each one feel that they have the same amount of authority and they get into 224 00:21:27.740 --> 00:21:34.540 a horn-locked, head-on, toe-to-toe, knuckle-to-knuckle confrontation and you can have just 225 00:21:34.540 --> 00:21:41.980 one problem after another. So I recommend in joint ownership that you clearly delineate not only the 226 00:21:41.980 --> 00:21:49.020 amount of property that is yours, but where the control of that property resides. If you can do 227 00:21:49.020 --> 00:22:02.260 Now let's consider corporate ownership. Corporate ownership is a particular type of ownership 228 00:22:02.260 --> 00:22:10.700 that was created in an effort to avoid the laws relating to debtors. It is a means of 229 00:22:10.700 --> 00:22:17.940 limiting the responsibility of persons who are going into major investments. The key 230 00:22:17.940 --> 00:22:25.580 The key here is this. In order to have corporate ownership, what you do is you create a fictional 231 00:22:25.580 --> 00:22:31.900 owner. This is the corporation or the corpus. That's the word that means body. You create 232 00:22:31.900 --> 00:22:41.300 a fictional body. And then the corporation owns the assets. And the owners of the corporation 233 00:22:41.300 --> 00:22:48.580 And don't own the assets, they own the corporation. So the property is removed one step away from 234 00:22:48.580 --> 00:22:54.740 the human owners by putting a fictional owner in between the owners and the property. And 235 00:22:54.740 --> 00:22:59.920 that's what is meant by corporate ownership. Now one of the advantages here is that this 236 00:22:59.920 --> 00:23:07.260 does give control to the individuals who own the corporation. That is, here you have a 237 00:23:07.260 --> 00:23:12.260 The Theory of Money and Credit 238 00:23:37.260 --> 00:23:40.900 Keep your stock. You can sell it. You can give it away. You can burn it up. It's yours. 239 00:23:40.900 --> 00:23:45.540 You can do as you please with what's yours. But the fact that you own, say, ten shares 240 00:23:45.540 --> 00:23:52.620 of, well, anybody's stock, United Updike, whatever that is, doesn't authorize you to 241 00:23:52.620 --> 00:23:58.940 go into a United Updike sales room and say, well, that particular updike over there is 242 00:23:58.940 --> 00:24:04.420 mine because I own ten shares of stock. You don't own any part of that. You own ten shares 243 00:24:04.420 --> 00:24:09.620 of the overall corporate structure, and that's how that works. That's a special type of 244 00:24:09.620 --> 00:24:17.180 ownership that limits the amount of responsibility, and the reason this was done was because of 245 00:24:17.180 --> 00:24:24.060 the laws against debtors back in the old days, where if a man went into debt and found for 246 00:24:24.060 --> 00:24:29.420 any reason that he couldn't pay it, he would be sold, or not really sold, he would simply 247 00:24:29.420 --> 00:24:35.460 He could be convicted of debt and he could be thrown into prison or he could be put into 248 00:24:35.460 --> 00:24:43.820 what was called peonage and then he would have to serve out his life in an effort to 249 00:24:43.820 --> 00:24:49.860 pay the debt. Well, let's suppose the debt was quite large. Then his wife and his children 250 00:24:49.860 --> 00:24:56.340 could also be put into peonage and this could go on for four generations under the biblical 251 00:24:56.340 --> 00:25:00.620 assumption that the sins of the father may be visited on the sons even to the third and 252 00:25:00.620 --> 00:25:07.160 fourth generation. And so if a man ran into debts that were large, then it was possible 253 00:25:07.160 --> 00:25:14.280 for him to condemn himself and his descendants to virtual slavery until that debt could be 254 00:25:14.280 --> 00:25:20.420 paid off. And so to get around that, they created what were called limiteds at first. 255 00:25:20.420 --> 00:25:28.160 This was done in England, and the amount of debt responsibility was stated to begin with. 256 00:25:28.160 --> 00:25:34.080 This is a limited operation, and the owners would be responsible up to so many pounds 257 00:25:34.080 --> 00:25:39.620 or so many dollars, as the case might be, and beyond that they would not be responsible. 258 00:25:39.620 --> 00:25:44.060 And so then you knew when you were dealing with this particular corporation or limited 259 00:25:44.060 --> 00:25:49.980 as to the extent of the credit that you ought to extend it, because beyond that these persons 260 00:25:49.980 --> 00:25:55.340 were not involved. You see, when the corporation borrows money, the corporation has to pay 261 00:25:55.340 --> 00:25:59.340 it back, but not the owners of the corporation, because they didn't borrow the money. The 262 00:25:59.340 --> 00:26:06.340 corporation did. So that is what that's for. It provides a cushion between the owners and 263 00:26:06.340 --> 00:26:12.580 the property itself, or the obligations, or, of course, the benefits. Whatever would be 264 00:26:12.580 --> 00:26:17.420 there, there is a pad between the owners and the property itself. 265 00:26:17.420 --> 00:26:24.300 Now the third or the fourth type of ownership that we're talking about is collective ownership. 266 00:26:24.300 --> 00:26:30.100 And this is a very special type of ownership and it does get us into a lot of difficulties. 267 00:26:30.100 --> 00:26:37.820 When we have collective ownership, the characteristic is this. We have a property and we are told 268 00:26:37.820 --> 00:26:45.060 that each one of us owns the whole property in concert with a great many other people 269 00:26:45.060 --> 00:26:54.060 who also own the whole property. Now sometimes collective ownership is also called public 270 00:26:54.060 --> 00:27:00.260 ownership or government ownership and this is the kind of ownership that appears there. 271 00:27:00.260 --> 00:27:05.980 For example, if you have a public park, it will be said that the park is owned by the 272 00:27:05.980 --> 00:27:12.460 people in the area or the taxpayers or whatever and each one of them is an owner and they 273 00:27:12.460 --> 00:27:18.380 They own the park jointly with all the other owners who also own it, or actually jointly 274 00:27:18.380 --> 00:27:22.380 is an incorrect word there, I should have said they own it collectively with all of 275 00:27:22.380 --> 00:27:23.380 the other owners. 276 00:27:23.380 --> 00:27:29.540 I ran into this particular experience myself personally when I was in Colorado Springs 277 00:27:29.540 --> 00:27:32.480 and was the editor of the paper there. 278 00:27:32.480 --> 00:27:36.000 There's a very nice park in downtown Colorado Springs. 279 00:27:36.000 --> 00:27:41.920 It's a block square and it's called Acacia Park and shortly after I had taken up the 280 00:27:41.920 --> 00:27:52.880 The City Hall wanted a particular weekend set aside so that people coming up from another 281 00:27:52.880 --> 00:27:58.040 town could have use of the park, and therefore they wanted us to run a story to the effect 282 00:27:58.040 --> 00:28:06.120 that this park was reserved for this other group on this weekend. So I had a long discussion 283 00:28:06.120 --> 00:28:14.960 with the City Manager over who owned the park. And it worked out that he wasn't too sure 284 00:28:14.960 --> 00:28:20.600 and neither was I. Because what happened was that the people who paid for the park were 285 00:28:20.600 --> 00:28:26.480 the taxpayers, but they couldn't manage the park. This was managed by another group. 286 00:28:26.480 --> 00:28:30.360 But the people who managed the park, well, they really didn't have to pay for it, but 287 00:28:30.360 --> 00:28:34.280 the people who used the park didn't have to pay for it and didn't manage it. And you 288 00:28:34.280 --> 00:29:03.280 We'll talk more on the subject of property another time, and, of course, the subject of ownership. 289 00:29:03.280 --> 00:29:05.280 Thanks very much.